Everbay Capital Advocates for Strategic Changes at Golden Entertainment

On November 6, 2025, Everbay Capital LP, a New York-based alternative investment management firm, publicly reached out to the Board of Directors of Golden Entertainment, Inc. (NASDAQ: GDEN). The firm, which has been a shareholder since 2021, proposes a significant alteration in strategy aimed at boosting shareholder value through a proposed sale-leaseback of the company's casino real estate assets. This strategy would not only facilitate debt payment but also provide capital to fund a special dividend for shareholders, potentially unlocking substantial value.

Everbay Capital's communication comes amid growing concern over Golden Entertainment's stock performance, which has underperformed significantly compared to other gaming entities and market indices. The firm pointed out that despite potentially strong returns within the gaming market, the total shareholder returns at Golden Entertainment have sagged by over 27% in the past year alone. With equity markets seemingly thriving, this disparity raises questions about corporate governance and strategic direction at Golden Entertainment.

Proposed Financial Strategy

The core of Everbay's proposal revolves around the immediate execution of a sale-leaseback transaction regarding Golden's casino real estate. This strategy displays a classic approach seen in similar sectors where real estate is monetized to free up substantial capital. Everbay estimates that such a transaction could provide around $1.2 billion in post-tax proceeds.

Debt Repayment and Dividend Allocation

Following the sale, Everbay suggests that management use the sale proceeds to repay approximately $385 million of net debt, and distribute roughly $819 million of the remaining funds to shareholders as a special dividend, estimated at around $30 per share. According to Everbay's calculations, this special dividend could represent an astonishing 150% of the company's current stock price, radically transforming shareholder value.

Establishing a Special Committee

Besides the immediate financial restructuring, Everbay proposes that the Board forms a special committee of independent directors tasked with evaluating the company's strategic alternatives post-sale. This committee would explore options for the remaining company, which would include the casino operations and the tavern business – referred to as RemainCo. Everbay is keen on ensuring that any decisions regarding RemainCo are handled with transparency and strategic insight, advocating for thorough evaluations conducted by qualified external advisors.

Market Conditions and Valuation Insights

Everbay's letter provides a comprehensive analysis of current market conditions, particularly regarding the trend of significant gaming operators selling off their real estate. The firm emphasizes that the existing market for gaming REITs like Vici Properties and Gaming Leisure Properties represents a compelling opportunity for Golden to realize full value from its real estate holdings through competitive bidding processes.

With estimates of a lease-back valuation standing at about $103 million annually, Everbay's projections suggest that the real estate could be worth nearly $1.4 billion. This is significantly more than the company's implied enterprise value in light of its stock price, indicating that substantial untapped value exists within Golden's assets.

Valuing RemainCo

The strategic discussions also touch upon the valuation of RemainCo, which is projected to generate $50 million of EBITDA. Everbay suggests that even with modest evaluation multiples applied, the firm believes this division could easily be valued in excess of $12 per share in public markets. The potential for attractive returns remains, even when considering the independence of the remaining business post-sale.

In final reflections, Everbay Capital reaffirmed its long-term investment in Golden Entertainment and its commitment to ensuring better governance for shareholders. They underscore the importance of taking decisive actions, particularly in light of the underwhelming stock performance, to realize the significant value locked within the company.

Everbay's letter serves as a clarion call to both the Golden Entertainment Board and investors alike, demanding a strategic reassessment aimed directly at enhancing shareholder wealth during a pivotal moment in the flourishing gaming industry.

Everbay Capital remains a key stakeholder in the movement toward unlocking inherent value within Golden Entertainment's portfolio, promising an intriguing turn in the ongoing narrative surrounding corporate strategy and value realization in the gaming sector.